Candover Takeover Talks with Pension End

LONDON (Reuters) – British private equity firm Candover Investments’ (CDI.L) talks about selling the company have broken down, leaving the firm to go it alone or find a new potential acquirer.

Once a leading light of the European private equity industry, Candover was forced to call a halt to new deals earlier this year and let investors withdraw their money from its flagship 2008 fund.

“Following a request to the potential offeror to clarify its position, the potential offeror has confirmed to the company it is no longer considering making an offer, and that all talks have been terminated,” Candover said in a statement on Friday. 

Having knocked back approaches last year at the height of its troubles, Candover entered into talks with Canadian pension fund Alberta Investment Management Corporation (AIMCO) in April.

Shares in Candover, which had spiked as high as 920 pence after April’s announcement, fell 7.8 percent on Thursday after the Financial Times reported that the talks were on the brink of collapse. They were a further 0.9 percent lower at 0928 GMT.

“Going forward, we think Candover needs to find another potential suitor or it may go down the road of being a realisation vehicle, selling the remaining assets down over a few years and returning cash to shareholders,” said Oriel Securities analyst Iain Scouller in a note.

Candover on Thursday announced the sale of diaper-maker Ontex to TPG and Goldman Sachs for 1.2 billion euros. It is currently reviewing options for Europe’s second-largest theme park operator Parques Reunidos, sources said.

Talks with AIMCO stumbled because the pension fund was unwilling to redeem Candover Investments 200 million pounds ($307 million) in private placement bonds and some bondholders were unwilling to roll over into the new structure, a source familiar with the situation said.

Much of Candover’s troubles stemmed from its complicated structure. Candover’s listed entity, Candover Investments Plc, owns the unlisted and independently run private equity manager Candover Partners.

When Candover Investments was unable to find the money to honour its commitment to the 2008 private equity fund, the structure unravelled.

With no money to do deals, Candover said in March it was considering new structures, which would allow it to go back to investors to raise new cash for deals.

(Editing by Samia Nakhoul)